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Nvidia Shifts Focus to New Advanced Packaging Technology

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Nvidia’s CEO Jensen Huang confirmed that while the company’s demand for advanced packaging from TSMC remains robust, the specific type of technology required is evolving. At an event in Taichung, Taiwan, Huang explained that Nvidia is transitioning its focus from CoWoS-S to CoWoS-L for its upcoming Blackwell AI chips. This shift, however, does not signal a reduction in capacity, but rather an increase in the use of CoWoS-L, a newer, more advanced version of TSMC’s chip packaging technology.

Nvidia had previously relied heavily on CoWoS-S for its AI chips, including the Hopper platform. As the company moves into Blackwell, which was unveiled in March 2024, it plans to transition existing CoWoS-S capacity to CoWoS-L. This change will impact TSMC’s supply chain but is seen as a step forward in Nvidia’s push to meet the growing demand for its AI chips.

Huang also noted that while packaging capacity for these advanced chips had previously been a bottleneck, it had expanded significantly in recent years, with available capacity now approximately four times greater than it was two years ago. Despite the increased demand, Nvidia has not been cutting orders but is instead increasing its reliance on CoWoS-L, which is expected to better meet the needs of Blackwell’s design.

The move to CoWoS-L technology and changes in Nvidia’s order patterns have sparked speculation about the potential impact on TSMC’s revenue, particularly with analysts like Ming-Chi Kuo noting the shift in Nvidia’s focus. Huang declined to comment on recent U.S. export restrictions that limit AI chip sales to countries outside a select group of U.S. allies, but the company’s strategies continue to evolve in response to market demands and geopolitical factors.

 

Nvidia Completes $700 Million Acquisition of Run:ai After Regulatory Scrutiny

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Nvidia has successfully completed its $700 million acquisition of Israeli AI startup Run:ai, following regulatory scrutiny from antitrust authorities. The European Commission granted unconditional approval for the deal earlier in December, after initially flagging concerns about potential competition issues. The acquisition, which had been under investigation due to Nvidia’s dominant position in the graphics processing unit (GPU) market, was cleared after the Commission determined it would not hinder competition. The U.S. Department of Justice is also reviewing the deal on antitrust grounds. Run:ai, known for its AI infrastructure optimization tools, announced plans to make its software open-source, extending its compatibility beyond Nvidia’s GPUs to support the broader AI ecosystem.

 

Nvidia’s Market Value Soars by $2 Trillion in 2024, Driven by AI Demand

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Nvidia has become the biggest gainer in global market capitalization for 2024, experiencing an unprecedented $2 trillion boost thanks to the explosive growth of artificial intelligence (AI) and the growing demand for its AI-focused chips across various sectors.

The chipmaker’s market value skyrocketed from $1.2 trillion at the end of 2023 to an impressive $3.28 trillion by the close of 2024, securing its position as the second-most valuable company globally. Despite this surge, Apple remained the leader, approaching a historic $4 trillion market valuation, driven by investor excitement over the company’s anticipated AI enhancements that aim to revive stagnant iPhone sales.

Tech Giants’ Rising Valuations

Microsoft secured the third spot with a market valuation of $3.1 trillion at the close of 2024, followed by Alphabet and Amazon, both valued at approximately $2.3 trillion. These tech giants played a major role in the performance of global stock indexes in 2024, with the S&P 500 index climbing 23.3% and the Nasdaq soaring 28.6%.

Optimism for 2025

Despite potential risks such as ongoing U.S.-China tariff disputes and the possibility of slower interest rate cuts in the U.S., analysts remain confident about the tech sector’s continued strong performance into 2025. Daniel Ives of Wedbush projects a 25% increase in tech stocks next year, fueled by favorable conditions under a potentially less regulatory environment under President Trump, along with the sustained AI revolution and upcoming AI investments.

“We anticipate robust tech stock performance in 2025, driven by the AI Revolution and an expected $2 trillion in AI-related capital expenditures over the next three years,” said Ives.